’Corruption nourishes poverty’

IPS
Huguette Labelle. Credit:Transparency International
24 September 08 - A new report by Transparency International (TI) lashes out at some of the world’s poorest countries for an "ongoing humanitarian disaster", and deplores the wealthiest for not doing enough to stem graft.

Interview by Ramesh Jaura/IPS, Berlin - Launching the 2008 Corruption Perceptions Index (CPI) Tuesday, TI Chair Huguette Labelle said: "In the poorest countries, corruption levels can mean the difference between life and death, when money for hospitals or clean water is in play. . . but even in more privileged countries, with enforcement disturbingly uneven, a tougher approach to tackling corruption is needed."

Corruption is "robbing the people of their future" and their lives, Labelle said in an interview immediately after the launch of the CPI, that measures perceived levels of public sector corruption. The CPI is a composite index, drawing on different expert and business surveys.

The 2008 CPI scores 180 countries (the same number as in 2007) on a scale from zero (highly corrupt) to ten (very clean). Denmark, New Zealand and Sweden share the highest score at 9.3, followed immediately by Singapore at 9.2. Bringing up the rear is Somalia at 1.0, slightly trailing Iraq and Burma at 1.3 and Haiti at 1.4.

Asked what the wealthy nations could do to help low-income countries combat corruption, Labelle said: "I would like to say, they should start at home. And they should make sure that they do not practise double standards."

Labelle has been awarded honorary degrees by 12 Canadian universities, and has held several important positions in the Canadian government. She headed the Canadian International Development Agency (CIDA) from 1993 to 1999. She is currently Chancellor of the University of Ottawa. She took over as TI chair three years ago.

Excerpts from the interview:

What is corruption?

We see corruption as the abuse of public trust, abuse of entrusted power for personal gain. It’s a rather broad definition but that’s how we define it.

Why does fighting corruption matter?

It matters a lot. Because we feel, based on what we have seen around the world, that corruption really prevents countries from developing. It nourishes poverty. Because if the resources that should be going to the development of a country are diverted to fiscal havens, the people are robbed of their future, people are robbed of their lives.

In low-income countries, rampant corruption jeopardises the global fight against poverty, threatening to derail the UN Millennium Development Goals (MDGs). The TI’s 2008 Global Corruption Report pointed out that unchecked levels of corruption would add 50 billion dollars (35 billion euros) — or nearly half of annual global aid outlays – to the cost of achieving the MDG on water and sanitation.

Would you say that there is a link between corruption and poverty?

Personally I am convinced that poverty does not cause corruption, but corruption causes poverty because if you are in a country with a lot of natural resources, with a lot of money moving into the government, but that money is being diverted into fiscal havens instead of going in for the development of a country, that does mean that the school will not be built, the health system will not be there, and the infrastructure will be weak, so that we will have poverty as a result. So yes there is a direct link between corruption and poverty.

How would you explain that despite the link between corruption and poverty in the eight MDGs (agreed by heads of state and government in 2000), corruption is not mentioned?

Well. It has not been identified in the MDGs. And that’s very interesting. If we look back, prior to 1993, people did not even dare talk about corruption — for a variety of reasons. And it has only been in 1994, 1996, where it finally became part of the discussion, it became an issue nationally and internationally, and has been increasing. So to go back to the MDGs: when they were agreed the corruption issue had not been taken on yet.

But, on the other hand, if you look at the UN Global Compact and the ten principles, corruption was added after the other nine had been identified. (The Global Compact is a framework for businesses that are committed to aligning their operations and strategies with ten universally accepted principles on human rights, labour standards, environment and corruption). So we pushed a lot for that to happen and it has happened. And so it’s now part of that.

Look at the work of the (Vienna-based) UN Office on Drugs and Crime (UNODC) where they have got more resources – because money-laundering which is very often the result of corruption — is moving so fast in the world now. And it also feeds into illicit arms, into illicit drugs. That office has been strengthened.

We also saw the Secretary-General of the UN and President of the World Bank announce — I was invited to be with them — the co-called STaR (Stolen Asset Recovery) Initiative — to try to deal with restitution of all the money that is taken out of countries, that should belong to the people of countries from which it has been taken out, because of corruption by corrupt leaders. So there is a lot of things happening. As such StAR(*)represents a global drive to help developing countries recover assets stolen by corrupt leaders.

But at the end we’ve got to find ways to get the people of a country, the civil society, responsible media, to put constant pressure on all governments at all levels.

What do you think the industrialised countries could do to help the developing countries fight corruption?

First of all, I would like to say, they should start at home. And they should make sure that they do not practise double standards. The continuing emergence of foreign bribery scandals indicates a broader failure by the world’s wealthiest countries to live up to the promise of mutual accountability in the fight against corruption. That’s one kind of double standards which leaves a state of confusion at the other end. So what is important is to be consistent and coherent and not have double expectations.

Secondly, they should ensure that in all the support that they do, they build in transparency and integrity and that results be demonstrated.

Thirdly, they should ensure that they provide the kind of support that the countries desire. Because very often though the institutions are there, a country does not have the resources. To be able to ensure that these institutions are strong, especially the judiciary, the office of the auditor-general, for instance, support is required.

Would you say that the level of economic development has an impact on corruption one way or the other?

That’s a difficult question. Economic development should be something positive. It should increase the money available for the development of infrastructure, social, physical and so on. It should be there to insist on the creation of jobs, although GDP growth does not always translate into jobs. But in principle it should be positive.

One has to be very careful, though, where that money is going. Because it is positive only to the extent that people benefit and that it’s economic growth with equity as opposed to 20 families becoming extremely rich.

* The StAR Initiative was announced at the April 2007 spring meetings of the World Bank and the International Monetary Fund. It involves a partnership between the World Bank and the UNODC, working with a range of other organisations including the International Monetary Fund, the Organisation for Economic Cooperation and Development, regional development banks, the Norwegian Agency for Development Cooperation, Switzerland, and several developing countries.
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